Real Estate

While politicians and pundits around the world commemorate the one year anniversary of Russia’s latest, most brutal invasion of Ukraine today, no one expected the country to still be standing even a month later when tanks and planes advanced on Kyiv in the early hours of February 24, 2022. We’ve watched the war from afar in horror, especially the punishing attacks on civilians and their water, gas and electricity infrastructure.

Separated by an ocean and frequently less focused on European matters, many Americans have been surprised (and inspired) by the Ukrainians’ grit, ingenuity, military strength, unity and resilience. They might also be surprised by another aspect of Ukraine, as I was, despite writing about interior design for 17 years.

The country has a thriving, impressive interior design industry. While its troops fiercely battle the Russian military, Ukraine’s cabinetry, textile, furniture and other building products manufacturers are in a friendly battle for American builders’ and designers’ purchasing power. They are getting American support on this front too.

U.S. Presence

One of the latest forays in their commercial campaign was establishing a Ukrainian Pavilion at Las Vegas Market, where specifiers from around the United States gather to see the latest interior design offerings twice a year. The Las Vegas pavilion participants, 15 small and medium-sized design products manufacturers, were selected by the Competitive Economy Program (CEP) for Ukraine within the United States Agency for International Development (USAID), an independent federal agency, in cooperation with Ukraine’s Export Promotion Office (EPO).

Iryna Mykulych, EPO’s representative to the pavilion, was bullish on her first visit to the event. “In comparison with European markets, the U.S. shows stronger resistance to recession,” she shared in a follow up note. She also saw strong potential in the residential market’s existing interest in European style adapted to American preferences. “Ukrainian manufacturers have European designs and heritage at more affordable prices,” she pointed out. Buyers at market were quite interested in that proposition.

This was a return engagement for Ukraine. The launch at Las Vegas Market took place in the summer of 2022 and a prior pavilion was organized with 50 exhibitors at the massive High Point Market in October 2022.

“The furniture industry is facing challenges caused by war, such as decreased demand on the domestic market. Thus, USAID CEP in Ukraine encourages manufacturers to enter international markets and scale up globally,” stated Olesya Zaluska, USAID CEP Chief of Party, in a written response to questions. (Those challenges also include recurring blackouts and ongoing labor shortages.) “These initiatives also contribute to the recovery of Ukraine,” she added.

“It was the first opportunity for many of our participating Ukrainian furniture manufacturers to showcase their beautiful pieces and craftsmanship for the North American market,” explained Jeff Michels, a Pavilion guide and Sonora, California hotelier about last summer’s experience, in our post-February meeting email exchange.

Michels was contracted by USAID CEP because of his understanding of building products specifier considerations, his familiarity with the Ukrainian design industry from his own hospitality projects, and from his first-hand knowledge of the country and culture having lived there from 2019 to 2021. His enthusiasm for the country’s design culture came through as he guided press attendees like me and prospective buyers through the winter pavilion. “We are in talks now with builders who are increasingly furnishing entire condominiums and looking for contemporary designs, but not willing to compromise quality over price,” he wrote to me.

The hotelier added that many of the visitors have placed orders in the last couple of weeks. (Official USAID CEP numbers report 18 contracts, 56 hot leads, 1000 visits and 120 meetings, with more deals expected soon.) These have included linens, home furniture, commercial grade chairs and tables, and cabinetry.

Strategic Support

According to Zaluska, the Ukrainian furniture industry (representing more than 10,000 small businesses and 100,000 employees), has generated nearly $32 million in sales, and was growing at an annual rate of 14% before the war. USAID CEP Assistance has covered a range of manufacturing and export training and participation support at international trade shows. “Each exposition offers additional insights into the respective marketplace and the ability to meet relevant buyers,” she commented.

Here and There

Garant, one of the manufacturers I met with in Las Vegas on the last afternoon of market, and whose catalogue I flipped through at their table, (since bringing full displays of cabinetry was too costly), makes side panels for IKEA, as well as complete kitchen, bathroom and closet storage collections for the European market. The two young women representatives came to market hoping to expand their employer’s sales to the American market. Despite the war and port blockades, the company’s lead times are comparable to American manufacturers’ schedules.

This is possible, Michels pointed out, because many of the manufacturers are located in the Lviv region near the Polish border. “Their factories are fully operational with quick production lead times and delivery to the U.S. in roughly three months from the time of an order taking place,” he wrote. Thus far, Lviv has been spared much of the bombardment of Eastern and Southern Ukraine, though they haven’t escaped completely unscathed. They’ve just played their part in keeping things going.

As Mykulych wrote, “It seems the wartime challenges made the entrepreneurs stronger in their wish to work as never before. For example, Tivoli, in the first days of the war didn’t stop production, but tried to get as many new customers and contracts as possible. While they can work, the business will have a lifeline to continue to produce and export. This belief and confidence play a great role in how businesses support the country.”

Last Words

Michels also observed this resilience and pledged his continued help, both as an extension of USAID and as a specifier. “I will continue to give my full support to the Ukrainian people by supporting them, their businesses and reminding buyers that they have a choice in where they spend their money – so why not support democracy and purchase from Ukraine, which is so closely aligned with Western democratic values?” the hotelier posited.

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